Cooper calls for 18% teacher raises over next two years
Gov. Roy Cooper proposed 18% raises Wednesday for public school teachers and principals, saying he wants to take North Carolina to No. 1 in the southeast in teacher pay over the next two years.
State employees would get across-the-board raises of 8% over those same two years as part of the budget proposal Cooper announced. Planned corporate income tax cuts, and personal income tax cuts for families making more than $200,000 a year, would be stalled under this proposal.
Cooper's proposal would total $34 billion in the first year, about 14.5% more than the $29.7 billion cap leaders in the Republican-controlled General Assembly have already agreed to among themselves. Top legislative leaders quickly declared the governor's proposal dead on arrival, with Speaker of the House Tim Moore saying it takes a "reckless approach to spending" and Senate Republican Leader Phil Berger calling it "an irresponsible, unserious proposal from a lame-duck governor who wants future North Carolinians to pick up his tab."
Significant raises for state employees and teachers are still likely under the legislative budget that will emerge and evolve over the next two months, but GOP lawmakers have typically funded raises at lower levels, and Berger and Moore have made it clear they'd prefer to accelerate, not slow, tax cuts, which they credit for the state's strong economy. They also voiced concern after Cooper's state-of-the-state speech last week, in which the governor called for "double-digit" teacher raises, that that sort of spending on teachers might crowd out other budget needs.
Cooper wants historic investments. His proposal would fully fund Leandro, the long-running court dispute over how much school funding the state constitution's promise of a strong education requires. It would also represent the largest investment in state government's workforce in 50 years, Cooper's budget office said. The budget also plans for Medicaid to expand, a long-held priority for the governor that may soon be realized.
“Once-in-a-generation opportunities require once-in-a-generation investments,” Cooper said at a Wednesday morning briefing. “This budget we’re presenting today meets the moment.”
Cooper's proposal includes $1 billion in new mental health spending and $1.5 billion to bolster early child care, two areas where there may be bipartisan agreement that significant new funding is needed. That includes $500 million over two years in grants to boost salaries at state-subsidized day cares and pre-schools, where hiring problems have made it difficult for parents to find childcare.
Teachers at all experience levels would get a minimum raise of 10% in the budget’s first year, including step increases. Their average raises of 18% over the entire two-year budget would take North Carolina from 32nd in the nation in teacher pay to 16th in National Education Association rankings, Cooper said. Bus drivers and other noncertified personnel in K-12 schools would get 9.5% raises over those two years.
All school employees would also get retention bonuses: $1,500 for those making less than $75,000 a year and $1,000 for those making more.
State employees would also get those same retention bonuses in addition to across-the-board raises, Cooper said. There’s additional money in this proposal for higher pay increases for state employees in step plans, Cooper said, and extra money that individual agencies can use to boost salaries further in the state’s harder-to-fill jobs.
Many state agencies have vacancy rates over 20%, their highest levels in a decade. There is bipartisan agreement that state employees need raises to deal with vacancies, but it remains to be seen how the legislature’s GOP majority addresses this.
On taxes, Cooper would return the state’s personal income tax system to a tiered one, partially rolling back the move to a flat tax Republicans implemented years ago. He’d create two tiers: One for families making less than $200,000 a year, which would see their rate step down to 3.99% by 2027.
Those making more than $200,000 a year would continue to pay 4.75%.
The current plan, on personal income tax which GOP lawmakers have said repeatedly they hope to accelerate in the coming budget plan, is for all taxpayers to fall to 3.75% in 2027.
Cooper wants to halt planned corporate tax cuts and freeze the rate at its current 2.5%. The Republican plan is to phase this tax out altogether by 2030. The NC Chamber has said that the 2.5% rate is already competitive and that it has not advocated further cuts to this tax, but Republican leaders have indicated they plan to go forward with the cuts, which passed into law in 2021.
Cooper said further corporate income tax rate cuts would largely help out-of-state and large corporations. Moore, R-Cleveland, said in his statement that Cooper wants to eliminate "the tax cuts that will help North Carolinians make ends meet and have attracted families and businesses to our state."
"Over a decade of Republican budget leadership has put North Carolina on solid financial ground," Moore said. "This is no coincidence-- our fiscally responsible approach to spending works.”
Cooper's budget office said the state saw record job gains last year and the third largest population gain in the country, with 95% of that increase due to people moving here. That's part of the argument to boost investment: So government services can catch up with population growth.
Cooper's proposal also includes:
- $1 billion for school construction around the state.
- A $5 million fund, which may grow, to aid people affected by closure of the Pactiv-Evergreen mill in Canton. "We understand that this is a big blow" for Western North Carolina," Cooper said.
- A new prosecuting team to help local district attorneys handle large fentanyl drug cases
- $100 million for programs to create and preserve affordable housing, plus $35 million for home improvements meant to help senior citizens stay in their homes
- $100 million to develop new megasites to lure large manufacturing operations to North Carolina
- An additional $225 million, for a total of $320 million, for a fund used to match federal grants created in recent years to fund infrastructure projects. Among other things, this money can be used to draw down federal money to buy electric school buses.
- Changes to the state's unemployment insurance program that, among other things, will increase the maximum weekly benefit from $350 to $450 and the weekly minimum benefit from $15 to $100.
- Roughly $7 billion left in state reserve funds
Correction: This article initially misstated the percentage difference between Cooper's proposal and a spending cap Republican lawmakers have agreed to. The figure is 14.5%.
